Buying a house but occupiers want to remain in it for short while longer

Hi all,
I couldn't make this title any clearer cos its too late at night.
Basically, I a,m interested in a particular house which has recently come on the market. It suits me well, but I don't suspect it would suit most people.

The issue is that current owner occupiers want to remain in the house until the summer as the house they have purchased in its stead is being renovated. This suits me fine in actual fact.

However I should I approach the purchase of this house so that I get what I want but so that I can begin to draw down my mortgage so that I no longer have to worry about interest rates going up?

Why not buy now and they pay rent until they move?

We sold our home in Australia before returning to Ireland. We then rented it from the new owner for 3 months. It suited both of us. Exchange of contract and settlement went through as normal. The new owners solicitor did a short lease contract which we signed in the presence of our solicitor. I remember we paid 3 months rent in advance.

A few friends of mine did this, as in they paid rent. It was fairly common years ago. The fact it suits you both makes it even better.

I don't think that renting it is a good idea. You may be hit with higher stamp duty, insurance and other problems.

Interest rates will go up, whether or not you buy the house, unless you are planning to fix?

If you don't need the house until the summer, then exchange contracts now so that it is legally binding and don't take out a mortgage until you need the house.

Brendan

Be aware that if youu do rent it out and the three months they need to stay turns into a few extra months, the moment they are in the house for 6 months plus 1 day, they are entitled to a Part 4 tenancy, (i.e. a four year tenancy, irrespective of what type of lease you wish them to sign). If you want rid of them after that, you can give them notice based on your desire to move in (section 2 of Residential Tenancies Act) but if they dispute it, it will take the PRTB a minimum of a year to hear your case and you will still need to go to the District Court to turf them out as the PRTB won't bother.

Sorry to sound negative but I would run a mile from this. If they need to stay in the house til their renovations are finished, the chances are that they will do so - you have no control over how long their renovations will take and therefore no real control over when they leave. If that is ok with you, then offer to rent them the house - if not, then don't!

while i understand the arrangement might suit you fine, it might even suit the still the owners of the house so much, that they decide to stay longer - the thing with the renovations is, they always take longer than expected ...
if you can wait until summer or longer, do it by all means but if you want to buy a house now, go elsewhere ... we also bought a house from a family who are currently building a new house on a site and they moved to a rented house while this is happening - why can't the current owner do the same?

Thanks for the advice all. The house is a bit of a one off so I'm a bit more anxious about it. I've heard a few people suggest the rent option so I can see the possibilities there. Likewise I've been told that holding off until contracts are finalised and I'm ready to move in before getting caught in a mortgage. I am planning to fix for 5 years so maybe that counteracts that.

Why not just sign the contract and set the closing date as some time in the summer with vacant possession?

as far as i am aware you need to take vacant possession of the property. the bank wont be too happy to give you the mortage if there is no vacant possession. plus if you are renting it they may see this as an investment and you will have to pay higher rates of interest . and there mite be stamp duty implications if you are a first time buyer and the revenue see this as an investment

Ok, and if contract is signed now for date in June for example, it would just mean that mortgage would not be drawn down until then ya?

Mortgage approval will usually be for 3 months approx .... bank will question situation and will reissue revised offer letter.

If you sign a contract and don't draw down money within defined period you could be drawing all kinds of bank/financial confusion on yourself.

whackin said:

Ok, and if contract is signed now for date in June for example, it would just mean that mortgage would not be drawn down until then ya?

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Correct, the mortgage would be drawn down in June. If you have the mortgage offer now, chances are it'll be expired by June as most of the banks' loan offers are only valid for 3 months.

Also, your current mortgage offer will be for e.g. 3 year fixed at 3.19%. This isn't guaranteed until drawdown, i.e. if rates go up between now and when you're ready to draw down the mortgage, you'll get the new (higher) fixed rate, not the 3.19%, even though you've signed the contract to buy the house.